US Jobs Report Sparks Market Volatility Amid Massive Downward Revisions

The US Non-Farm Payrolls report for January revealed an unexpected drop in the unemployment rate to 4.3%, triggering an initial surge in the US dollar and Treasury yields. However, the positive headline was overshadowed by a sharp downward revision to 2025 employment data, which saw 858,000 jobs removed from previous tallies. US Treasury yields climbed between 4 and 7 basis points across the curve as markets reacted to the conflicting signals. Market expectations for a Federal Reserve rate cut in June cooled, with the probability falling to 76% from a previously fully priced-in status. The resulting price action was volatile, with the dollar retracing some gains as investors questioned the underlying strength of the labor market. This uncertainty underscores growing skepticism regarding seasonal adjustments and the divergence between official data and other indicators like ISM and ADP.